The 6 Sources Influencing Your Money

by J. Money - Last updated August 6, 2015

friends & influencers

It’s been two days since following in the footsteps of sir Benjamin Franklin, and I must admit I’m loving these 5 am wake ups a lot more than I thought I would.

I’ve completely forgotten what it was like to wake up on your own accord (and in silence for that matter – no crying babies, woo!), and it’s quite empowering to be able to set your own tone for the day too. I’ve been doing a lot more reflecting, a lot more slowing down, and a lot more of getting in that “powerful good stuff” each morning! Which I later found out meant prayer :)

It’s been quite the experiment so far.

I’ve also had the time to appreciate the messages I get more than usual too, one of which completely made my morning yesterday and led to the inspiration of this post! It came from Samantha A., and included a link to a TEDx talk titled “Change Behavior- Change the World” by Joseph Grenny, New York Times bestselling author and behavior change expert (who eerily reminded me of Special Agent Frank Lundy from Dexter, haha…)

I normally don’t have much time to sit there for 18 minutes and immerse myself in a video, but due to B. Franklin’s early-to-rise scheme I eagerly allowed myself a break from inner-thought and thoroughly enjoyed what I saw.

I know most of you won’t want to sit through it yourselves, but I’ll embed it here anyways in case you can sneak it into your lunch break or in between filing all those TPS reports ;) The good $$$ stuff comes at minute marker 6:00 if you need to skip to it.

“Change Behavior – Change the World”

(here’s the direct link if you’re reading via email)

Now while this surrounds the topic of change and doing good in the world, the real takeaway here is how we’re all influenced as human beings.

Specifically, the 6 main sources of these influences, and how to watch for them to better protect ourselves and our wallets!

Or, if you’re a “change agent” as this guy likes to say, how to get people to change their behavior in a more positive way – either in the world, or at your company/organization. Their research found that if you can figure out a way to harness these, you’re ten times likelier to produce profound behavior change than otherwise – which is pretty incredible!

So what are these 6 major influences?

  1. Personal motivation
  2. Personal ability
  3. Social motivation
  4. Social ability
  5. Structural motivation
  6. Structural ability

Per Joseph and team’s research,”The first two domains, Personal Motivation and Ability, relate to sources of influence within an individual (motives and abilities) that determine their behavioral choices. The next two, Social Motivation and Ability, relate to how other people affect an individual’s choices. The final two, Structural Motivation  and Ability, encompass the role  of nonhuman factors, such as compensation systems, space, and technology.”

This picture may be easier to understand :)

6 sources influence[credit: How to 10x Your Influence report by Grenny and team]

What this looks like in the real world…

To better illustrate this (and what’s partially shown in the video), Joseph and team ran a test with kids.

They put a handful in a room for 10 minutes, gave each one $40.00, and then tempted them with outrageously priced candy (like $6.00 for M&Ms!) and were told they could keep whatever they had at the end of it. They even asked them what they’d do with $40.00 before starting (which is a TON of money for a kid, btw) so they could hopefully lock onto their goals.

Do you think they did? :)

Well, spoiler alert, they did not. The average amount of money each kid had left by the end of the ten minutes was $13.00. Just thirteen!! Out of forty! And when they were asked what happened, none of them could really explain why.

So what happened? The 6 powers of influence happened.

In this first experiment, they skewed the influences to tempt them more:

  • They were given a taste test of the candy (personal motivation)
  • They weren’t prepared to handle such a new/weird situation (personal ability)
  • They were influenced by a couple of kids who went around (by design) saying things like, “You know, there’s a lot of awesome candy over there.” and “Dude, you should get a lot. As much as you can.” (social motivation)
  • They caved into peer pressure (social ability)
  • They were given an invisible credit card instead of cash (structural motivation)
  • They were surrounded by large visual cues of kids gawking over candy (structural ability)

Of course kids aren’t able to turn down that temptation! Haha… But guess what? Us adults aren’t the greatest at it either :) How many of these things have we probably experienced this week alone? Taste testing at Costco or Trader Joes? Friends buying up cool $hit or planning to party hard this weekend? Using credit cards over cash? And what about running into ads everywhere we look?

Round II of the experiment

After showing us that first experiment, they did another – only this time skewed more helpfully. The same parameters were in place, but the influences changed:

  • No free taste tests
  • Had them practice writing down earnings and expenses for 30 seconds
  • Changed the messages for the influencer kids: “I’m going to save my money. How about you?” and “I think I’m going to save my money. I think it’d probably be a good idea.”
  • Gave them cash instead of credit
  • Took down all the tormenting pictures

Think they saved more? Hell yeah they did! The average these kids held onto was a whopping $34.00. 270% more than the $13 from the other group! How incredible is that?

The point of all this, of course, is that we need to be aware that all these influences are hitting us in the face EVERY – SINGLE – DAY, and to be as prepared as we can when facing them. Most we can’t ignore even if we wanted to, but we can be vigilant on which ones pierce our wallets and which don’t.

SO KEEP YOUR EYES OPEN AND FIGHT THE GOOD FIGHT!

It’s a lot harder earning our money than it is to give away :(

————-
PS: If you want to learn more about these influences, here’s the full research paper on it (PDF): The Influencer Research Report. It was named The Change Management Approach of the Year by MIT Sloan Management Review. And then here’s the talk again too: Change Behavior- Change the World.

I’ve given you the spoilers on the kids and $$$ part, but the rest of the video is equally powerful. It focuses on a woman (and prostitute) born into the Mathare Slum of Nairobi, Kenya, and how these influences have changed her life over the years. It’ll give you plenty to be thankful for the next time you address your own Powerful Goodness! ;)

Jay loves talking about money, experimenting, blasting hip-hop, and hanging out with his two beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!

{ 60 comments… read them below or add one }

1 Chris Muller August 5, 2015 at 5:24 am

“It’s a lot harder earning our money than it is to give away”

That is the most powerful quote in this entire post. I love this concept, thank you for sharing the video too, I’ll have to use it at work. The situation you laid out with the ‘test’ they ran on the kids is powerful too. It goes to show how influential we can be and how easily we can be influenced. This can be a serious downfall with money, but it can also be an incredible help – depending on how you use it. We’re influenced all the time by the pressures of society (and crafty marketing) to buy things we think we’re supposed to have. New iPhones, new cars, new TVs, giant-ass homes… if we lived in a vacuum (metaphorically of course) or were the only people on the planet, none of this would even be a concept. We wouldn’t be influenced by anyone or feel the need to influence anyone. Pretty crazy stuff.

At risk of rambling… Discovery Learning has an assessment where you can evaluate your influencing style (among other nifty assessments). In my “day job” I do a lot of work around personalities, behavioral styles, influencing, etc… so if you’re interested, check it out: https://www.discoverylearning.com/products-services/influence-style-indicator/

Great post, J. In fact you’ve influenced me twice in the past week – the one-drawer challenge (yard sale) and the Ben Franklin schedule (I too have been getting up at 5am and have been productive as hell). Thanks again man.

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2 J. Money August 5, 2015 at 7:03 am

Rock on man! A friend of mine told me that it feels like “a secret club” waking up at 5 when it’s dark and everyone is sleeping, and I agree :) So I’ll have to tell him you’re a new member to the club too – hah. While you’re waving your $200 around that you earned from that yard sale, yeah? ;)

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3 Chris Muller August 5, 2015 at 9:36 pm

Haha for sure. It’s funny too… my wife gets up at like 5:30 or 5:45, but if I wake her up any earlier than that… I’m as good as dead. So I tend to ‘slide’ out of the bed as quietly as possible. “Secret club” is right!

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4 Thias @It Pays Dividends August 5, 2015 at 6:50 am

Another interesting thought I’ve come across lately that kind of ties into this is the idea of visualizing your future self can help you delay gratification. I read about the idea in The Willpower Instinct by Dr. Kelly McGonigal and it talks about how we see our future selves as strangers so we always see the present as taking care of our selves now, instead of doing things now to help ourselves in the future. I think this is one of the big points on why younger generations have problems saving for retirement. One of the ways research has shown that we can counteract that is by visualizing our future selves which would help us get to know that “person”.

I’m 2 for 2 this week on the 5am wake up calls. Sure it is the beginning of the month so I need to be out the door by 6, but whatever motivates, right? :)

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5 J. Money August 5, 2015 at 7:09 am

I read something about that “future self” thing too! In fact, I believe I shared it on Rockstar Finance the other month… here we are:

http://womenmoneyandsuccessmag.com/robyns-corner-want-to-save-more-meet-your-future-self

Every time I think of “future self” I think of How I Met Your Mother in that one episode when they kept pushing off problems and said they’d let their future selves deal with it and just have fun today, haha…. Now whenever I don’t feel like doing something I tell my wife “I’ll let future J. Money handle that” :)

You’re so right though – it’s hard to envision your future self as still yourself when it’s so far away. I have a hard time envisioning myself a month out!

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6 Jayson August 5, 2015 at 7:07 am

Make the undesirable desirable. This is one of the challenging thing to do, finding the good even though you see nothing good. It’s like we have to do despite the fact we don’t personally want to do it. But, we have to force ourselves. For instance, working overtime even if you feel tired.

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7 Talaat August 5, 2015 at 7:21 am

This is so cray! But also like obviously true as well. I mean whether we like to admit or not, in so many ways, we really are the company that we keep. And if we’re not careful our “influencers” can take us down a path of positivity or negativity if we don’t have our eyes open.

I’m also in the 5AM club and it’s been a phenomenal way to start each day!

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8 J. Money August 5, 2015 at 10:26 am

WOO! That doesn’t surprise me either that you’re in the club – you’re a hustler through and through :)

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9 Jon @ Money Smart Guides August 5, 2015 at 7:42 am

As I was reading the first experiment with the kids, all I could think about was pro athletes who go broke. The examples are eerily similar. You give people millions of dollars who have no ability to handle that kind of wealth, society and friends are telling them that when you have money you have big houses and cars, and everywhere you look, advertisements sell you on this idea. It’s no wonder why so many of them go broke.

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10 J. Money August 5, 2015 at 10:53 am

Exactly! That’s a perfect example…

Except for this guy :)
http://www.businessinsider.com/john-urschel-explains-why-he-drives-a-nissan-versa-2015-8

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11 Kalie August 5, 2015 at 7:52 am

This is fascinating. I love when someone can express so much about our real financial situation in a compressed way. It makes the ways we so often handle money look absurd, but is eye-opening and motivating for change. And TPS reports & “good powerful stuff” a.k.a. prayer…you are cracking me up!

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12 J. Money August 5, 2015 at 10:54 am

Gotta have fun with this stuff, right? :)

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13 Elise@ Simply Scaled Down August 5, 2015 at 8:03 am

Awesome job getting up at 5 (repeatedly). I had every intention of trying that this week, too…but alas, this tired momma didn’t wake up to the alarm! So I’m trying to cut out sugar this week. So far so good. (If you don’t count the entire batch of cookies I ate the “first” day)

And I loved that video. It just speaks volumes to what we go through every day. Love it. Thanks!

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14 J. Money August 5, 2015 at 10:55 am

Sugar is a good habit to try and break! I tried that last year with coffee (and other things) and haven’t added any since! A feat I never thought I could accomplish! As for the other things like ice cream and cookies, well, baby steps… :)

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15 Brian @ Debt Discipline August 5, 2015 at 8:11 am

I like the early wake up call too. I find you can often be very productivity in the early AM, as you don’t have all of the distraction started yet from the normal day. Just recently I unsubscribed to a number of retail e-mails that I I had signed up for coupon offers, because I found the subject of their e-mail were just trying to influence me to buy more crap. ” You deserve…”, “You work hard, now play hard…” All geared towards separating me from my cash. No thank you.

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16 J. Money August 5, 2015 at 10:56 am

Ugh, I know – it’s ridiculous. Gotta keep a clutter/temptation free inbox just like you do a physical one at home! It all makes the brain (and wallet) happy!

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17 AMW August 5, 2015 at 8:22 am

Thanks for posting! This has got me thinking about all this on a deeper level. This experiment was interesting to watch. Although, anyone with children, especially teens, has seen this happen in real life in many scenarios. Even as an adult I have realized that some people just aren’t good people to have in your life for the reasons shown above. Now to use this info to my advantage….

P.S. I have been a part of the 5am club for a couple of decades…every time I think I will just sleep in and “relax” it totally messes up my day now…lol

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18 J. Money August 5, 2015 at 11:00 am

I feel like I MUCH better understand now why parents are so protective over who their kids hang out with all the time. I always hated that they vetted them growing up, but man – that’s like your #1 influence right there! Friends and people at school! I’m gonna be extra leery myself when ours get older… So many people going down the wrong paths and screwing up their lives, not even just financially. It’s really the drug/sex stuff that scares me. And now bullying since the internet and smart phones made it all so much easier to do :(

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19 Dee @ Color Me Frugal August 5, 2015 at 8:48 am

What an interesting experiment! Social influences can be such powerful motivators. Congrats on rockin your 5am goal!

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20 Mrs. Crackin' the Whip August 5, 2015 at 8:54 am

Yes there are so many influences that we deal with every single day! We make countless choices over and over all throughout the day. I think the best way to combat this is through routine. Don’t ever allow yourself some of these choices or to even consider some of the options. I heard on the radio yesterday that I would have a better day if I went to McDonalds! Really?! You’ve got to be kidding me. That sounds ridiculous!

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21 J. Money August 5, 2015 at 11:04 am

Better than the ad I heard recently – “You deserve a new facelift!” Gag me.

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22 Mrs. Budgets @mrandmrsbudgets August 5, 2015 at 10:01 am

It’s funny what works on kids doesn’t change much as we get older. The secret for us to get up at 5am is to go to bed sooner and work on quality of sleep. We have a nightime ritual which helps that includes no electronics an hr before bedtime.

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23 J. Money August 5, 2015 at 11:06 am

YES! This only works with an earlier bed time for sure. I’ve been going to bed between 9:30 and 10:30 which is a new world record for me ;) I cut out electronics two years ago in or before bed for the most part – and also in the first thing in the morning!

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24 Chris @ Flipping A Dollar August 5, 2015 at 10:03 am

LOL This is why I don’t do the free food at Costco. I don’t even want to be tempted.

I also go to the grocery store with my damn list and I will not get anything other than that! I have no willpower once I’m home so if I buy it, I will eat it at a disgusting pace.

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25 J. Money August 5, 2015 at 11:06 am

The trick is to also NEVER ever EVER go grocery shopping while hungry! You’ll want everything!

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26 Jason @ Phroogal August 5, 2015 at 10:37 am

I love the psychology behind financial choices. Do you have any good book recommendations that would go well with this post?

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27 J. Money August 5, 2015 at 11:08 am

Glad you like it man!

You can read the PDF in full which goes over all the research and stuff from this? There’s a lot of interesting stuff in it – 13 pages worth:

http://budgetsaresexy.com/files/Influencer-Research-Report.pdf

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28 Feeling Financial August 5, 2015 at 10:41 am

Interesting. Changing the influencer messages kind of reminds me how they say you’re the average of the 5 (or whatever) people you spend the most time around. I guess it’s good to frequent PF sites and let some of it rub off on me.

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29 Maggie @ Northern Expenditure August 5, 2015 at 10:42 am

Not in the 5AM club. Sorry. But I do like to immerse myself if the financial good stuff every morning. The online FI community is a great influence for good. Harnessing virtual peer pressure to make good choices so when I am around dumb financial people the rest of the day, I can hope to make it out of the study having only purchased one dumb pack of $6 M&Ms like the last test. :)

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30 [email protected] and the Beach August 5, 2015 at 10:45 am

There is no doubt about it that there are powerful influences out there and every day you are battling those influences whether you think you are or not. I find this fascinating because I love studying human behavior and why we do the things we do. Glad your new routine is going well. I’m trying a morning meditation practice using headspace. I swear it’s one of the hardest things I’ve ever done. I rather run 10 miles than “focus on breathing” for ten minutes. :)

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31 J. Money August 5, 2015 at 11:08 am

Haha… I’m glad you’re trying it and not me :)

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32 Rick August 5, 2015 at 11:01 am

Love this article! I wanted to tell you that the Benjamin Franklin experiment is a great move and I am joining you. I woke up early on Monday and had a great workout at 5 am. Being up early just puts you in a place to see the world without the stress of “having to” rush. This article was powerful and I am considering all of the influences “robbing” my wallet right now. Thanks.

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33 J. Money August 5, 2015 at 11:12 am

So glad to hear it, Rick! I haven’t had success in sneaking in a work out just yet, but I’m still hopeful :) Way to give it a shot!

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34 Darrell August 6, 2015 at 4:53 pm

I tried. I wanted to do the early wake up call to do my runs in the morning. I made it two days…failed the 3rd. I’ll make it again tomorrow…this used to be clockwork for me!

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35 J. Money August 7, 2015 at 1:28 pm

hey – two days is better than none!

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36 Kristin Wong August 5, 2015 at 11:14 am

“How many of these things have we probably experienced this week alone? Taste testing at Costco or Trader Joes? Friends buying up cool $hit or planning to party hard this weekend? Using credit cards over cash? And what about running into ads everywhere we look?”

This is such interesting research because it makes sense of everyday temptations like these ^^^ by organizing them so we can understand where they’re coming from and why they happen. Understanding how our behavior is influenced can go a long way toward figuring out how to redirect it! Great article, J$!

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37 J. Money August 6, 2015 at 1:46 pm

You know it, friend! So glad you like!

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38 Done by Forty August 5, 2015 at 12:30 pm

I’ve had a sneaking suspicion that credit-card churning was impacting our spending behavior subtly, and this post might be pointing to the reasons why. I wonder if there’s some way to parse out the impact this might have on our spending…

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39 J. Money August 6, 2015 at 1:46 pm

There is – spend only cash for a month and compare the difference :)

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40 Simple Is The New Green August 5, 2015 at 12:53 pm

I don’t have children, but if I did, I would not bring junk food or candy into the house. Instead I would make them earn money by doing chores and then walk to go get the junk food themselves. It may sound harsh, but that is similar to how my dad taught me and it teaches the lesson of earning & spending. Plus, it teaches them a life long lesson that junk food shouldn’t be sitting around the house for instant gratification!

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41 J. Money August 6, 2015 at 1:48 pm

I’ll have to try that when my kids are old enough to understand :) Though something tells me it’s a lot easier in theory than in practice.

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42 Kayla @ Femme Frugality August 5, 2015 at 12:53 pm

I don’t wake up at 5 am, but I have been getting up earlier this week and it’s been great!

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43 Andria August 5, 2015 at 2:10 pm

Thank you for this post. This was amazing and something I really needed to hear today!!!! I watched the video too loved it.

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44 J. Money August 6, 2015 at 1:49 pm

Great! Cool name too :)

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45 Stacy Anderson August 5, 2015 at 2:57 pm

I have been getting up at 5am or earlier myself after reading a book called The Miracle Morning. Great read if you want some morning inspiration.

I love this blog! Thanks J. Money. :)
– Stacy

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46 J. Money August 6, 2015 at 1:50 pm

Going now to Google!

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47 Duncan's Dividends August 5, 2015 at 5:59 pm

Awesome article and one I can really relate to with my job as a change manager. Something that’s cool and that I can reflect on for work. Thank you!

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48 J. Money August 6, 2015 at 1:52 pm

Are you really a change manager? That’s pretty neat!

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49 Ramona August 6, 2015 at 5:58 am

It’s no wonder, most of our money mistakes come from peer/media ‘pressure’, from lack of experience in budgeting etc. The moment we get more aware of our money, we are making better decisions. Now it’s time for us to try inspire out children to do better than we did.

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50 Hannah August 6, 2015 at 7:18 am

I managed to catch this video, and I was so impressed! I will definitely be referencing that diagram again.

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51 Free to Pursue August 6, 2015 at 8:39 am

Ha! We’re on the same wave length.

I’m 1/2-way through the book “Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives” and there are many of the same themes regarding influences. Everything from $$$ to weight to loneliness to love is highly influenced by our environment. I’m becoming more careful about where I go and who I hang around with! ;)

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52 J. Money August 6, 2015 at 1:55 pm

I bet!

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53 Kurt August 6, 2015 at 3:20 pm

Marketers must exploit the heck out of the sort of information yielded by research of the type you use as an example. Very creepy how we’re being bombarded more or less continuously by attempts to manipulate our thoughts and behavior. No way to avoid it unless you want to live like the Unabomber. The best we can do, as you note, is be aware and vigilant.

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54 J. Money August 7, 2015 at 1:29 pm

Yup! Although you can surround yourself with people that more align to your values/lifestyle and such which would help. Can’t pick your family though – hah.

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55 Isabelle August 6, 2015 at 3:46 pm

Well… I don’t know about the Benjamin Franklin story, but you just motivated me to start getting up at 5h am on weekdays (so 1h before the kids) to do a workout and shower. This is what I need to change in MY life, to start taking better care of my health. And thanks for the link to the Ted talk, it’s interesting.

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56 J. Money August 7, 2015 at 1:30 pm

Yes! Good! Let me know if it works out well for you. I’m loving every second of it :)

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57 Paganpatty August 6, 2015 at 6:32 pm

Awesome video! It inspires me to try to more of a “social scientist”. Jane is an inspiration. I’m so happy she realized she wasn’t a disposable human being. Everyone should watch this!

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58 J. Money August 7, 2015 at 1:32 pm

Agreed! Glad you liked it!

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59 Christine @ The Pursuit of Green August 6, 2015 at 6:43 pm

All these methods are used by marketing companies to get us to give us their money!!!!! Once you lean what methods work then you can start combatting them. The best method so far for me is to stop and reflect before I buy something. If I really need it or if its an impulse buy motivated by outside factors.

Admittedly I’ve used the first tactic before to suck in people for a charity bake sale I’ve done before. Giving away free samples really opened up people and brought them over to buy things.

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60 J. Money August 7, 2015 at 1:31 pm

Haha…. Yes, once you know how the system works you can work it to your own advantage ;)

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